Social Security and Medicare Benefit Cuts Still Possible in Fall Budget Deal
by Patrick Lester, 7/30/2013
Cuts in Social Security and Medicare benefits are still being actively considered in the ongoing discussions between Senate Republicans and the Obama administration, according to a new report in Politico.
The two sides are reportedly seeking a deal that would offset one to three years of sequestration-related budget cuts. If the sequestration cuts were replaced, rather than repealed, lawmakers would need to find a combination of tax increases and spending cuts totaling about $100 billion per year. So far, a deal has been elusive, but pressure may build in September because Congress will face a possible government shutdown on Oct. 1.
According to the story in Politico:
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Sen. Bob Corker, the Tennessee Republican, said there was a “pretty productive” meeting last week, and disputed assertions that the two sides were at an impasse. He added that the group is akin to a “sounding board” and isn’t horse-trading policy proposals.
Yet, he suggested the talks were at a crossroads.
“I think we’re at a point where a decision has to be made: Is our goal to try to substitute mandatory spending reductions for the sequester?” Corker said. “So is that what our discussion [is] about? Or [is] our discussion about doing something much bigger than that?”
Republicans and the White House both agree on proposals to cut Social Security known as chained CPI, referring to reduced payments to beneficiaries because of how annual cost-of-living adjustments are calculated. And the two sides seem to be on the same page regarding reducing benefits that wealthy seniors now receive from entitlement programs, a proposal known as means testing.
But the White House wants new taxes in exchange for those entitlement cuts, something at which the GOP continues to balk. And Republicans have pushed for the two sides to agree on going beyond the typical 10-year budget projections and instead examine how much the budget picture will worsen over the next 30 years. But the White House is resisting a 30-year budget projection, believing the numbers are unrealistic.